The national average gasoline price has fallen to a six-month low at $2.76 for a gallon of unleaded fuel on the same day the U.S. reimposed sanctions on Iran, which haven't driven prices high as the oil market has remained steady. The U.S. has granted China a waiver so that country can continue to purchase Iranian oil with the sanctions in place.
Gasoline prices have fallen to a level not seen since April. The national price is 6 cents lower than a week ago, 15 cents lower than a month ago, and 24 cents higher than a year ago. If demand continues to fall, gasoline prices could get even cheaper, according to AAA.
"With the market anticipating and reacting to the pending Iran sanctions throughout the summer, motorists likely have seen the worst in terms of retail prices for the year," said Jeanette Casselano, AAA spokesperson. "If the crude oil market remains steady, gas prices are likely to continue to fall as much as ten cents in the near-term."
The Trump administration's new sanctions against Iran will impede its ability to export oil, but it's not clear by how much. Crude oil prices have been increasing since the May announcement that the sanctions will be reimposed, and reached as high as $77 per barrel this summer. Iranian oil exports have fallen 1 million barrels per day since May. Crude oil has remained below $70 per barrel for the past two weeks.
West Texas intermediate, the American benchmark, trades at about $63 per barrel and has fallen about $10 in the past month, reports the New York Times. To make up for the lost Iranian barrels, the U.S., Russia, and Saudia Arabia have increased output in recent months.
States with the largest weekly decreases include Ohio (down 12 cents), Michigan (down 9 cents), Indiana (down 9 cents), Delaware (down 8 cents), Oklahoma (down 8 cents), Texas (down 7 cents), Maryland (down 7 cents), Missouri (down 7 cents), Florida (down 7 cents), and Georgia (down 7 cents).
States with the least expensive markets include Delaware ($2.44), Missouri ($2.46), South Carolina ($2.46), Oklahoma ($2.47), Texas ($2.48), Louisiana ($2.49), Mississippi ($2.49), Alabama ($2.49), Arkansas ($2.51), and Virginia ($2.52).
Meanwhile, the average price of a gallon of diesel fell 1.7 cents to $3.338, which is 45.6 cents higher than a year ago, according to the U.S. Energy Information Administration.